Suit vs. DPH rips medical marijuana shop financier

Monday, March 17, 2014 -- Anonymous (not verified)

Rival: Probe licensing process

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Tuesday, March 18, 2014

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John Zaremba

A key financier of a proposed pot shop in Lowell was once sued by a former business associate for fraud, owed nearly $23,000 in taxes in New York and filed for bankruptcy four years ago, according to a lawsuit filed yesterday against the state’s embattled health department.

The suit — filed by the Cardiac Arrhythmia Syndromes Foundation in Suffolk Superior Court — is at least the fourth brought against the Department of Public Health by a rejected dispensary since the agency announced 20 finalists for the state’s first lucrative pot-pharmacy licenses.

“We’re not looking for the entire process to be thrown out,” CAS attorney Joseph Ruccio said, referring to two rejected applicants that want a judge to stop DPH from issuing licenses until they can investigate the review process further. “We’re looking for CAS to get provisional status in Lowell, and that would come at the expense of Patriot Care. We’ve teed up a very specific issue.”

The CAS suit dredges up the civil court history of Nicholas Vita — the treasurer of both Patriot Care Corp. and its lender, Columbia Care. Online records show the state of New York issued a tax lien against Vita in April 2010 for $22,949.24, a matter listed as “satisfied” as of July 19, 2010. Federal court records also show Vita field for Chapter 11 bankruptcy on behalf of Diabetes America Inc. in December 2010.

In a Texas suit, a former affiliate of his diabetes-care company claimed Vita secretly authorized a settlement from a company they had sued for failing to provide specialized glucose-measuring cell phones. When the associate went to that company to collect, he was refused and told the settlement already had been paid, according to a Texas high court’s ruling in the case.

Vita was eventually dismissed from the suit in 2012, according to the plaintiff’s lawyer. Efforts to reach Vita and other Patriot Care officials yesterday were unsuccessful.

The CAS suit seeks an unredacted copy of Patriot Care Corp.’s medical marijuana application. DPH has posted all 100 applications online, but with several sections redacted including the part where applicants must disclose whether anyone on the executive management team has been sued for fraud.

A DPH spokesman declined to comment on the lawsuit.

The CAS suit is just the latest in a raft of accusations charging DPH with botching its pot shop rollout.

The Herald has reported multiple problems with the applications, including one company whose key financier is a convicted felon and multiple complaints from local officials who say the paperwork exaggerated their support.

The paper also has reported DPH fact-checked the applications only after naming the finalists, and that the contractor hired to score those applications had no medical-marijuana expertise.